(Reuters) – U.S. stock index futures rose slightly on Monday, with investors focused on results from AI darling Nvidia and a key inflation report due later this week, while confidence in a central bank rate cut in September remained high.
Markets welcomed comments from Federal Reserve Chairman Jerome Powell on Friday, saying “the time has come” to cut borrowing costs as upside inflation risks recede and demand for labor weakens.
The major indexes rose more than 1% in the previous session, with the S&P 500 and the Dow within 1% of their respective record highs. Rate-sensitive small caps posted their strongest day in six weeks as stocks continued to pare losses from the market rout of early August.
Traders are now betting on a 25 basis point or 50 basis point rate cut in September. The odds of the former have fallen to 63.5%, from more than 70% last week, while the odds of a 50 basis point cut have risen to 36.5%, from about 30% last week, according to the CME Group’s Fed Watch tool.
On Friday, we turn our attention to July’s personal consumption expenditures figures, the central bank’s favorite inflation indicator.
At 5:28 a.m., the Dow E-minis were up 15 points, or 0.04%, the S&P 500 E-minis were up 9.25 points, or 0.16%, and the Nasdaq 100 E-minis were up 47.75 points, or 0.24%.
As earnings season winds down, chip maker Nvidia, whose results are expected on Wednesday, rose nearly 1% in pre-market trading.
Markets were less forgiving of highly valued mega-cap stocks this quarter, fueling excitement around artificial intelligence.
They will be scrutinizing Nvidia’s earnings to justify its 160%+ year-over-year gains, which pushed its market cap to second place on Friday, just behind Apple’s.
Dell, Salesforce, Dollar General and Gap are also expected to report results this week.
Remarks are expected later in the day from Mary Daly, president of the Federal Reserve Bank of San Francisco and a voting member of the Federal Open Market Committee this year.
Geopolitical tensions in the Middle East pushed oil prices up more than 1%.
BJ’s Wholesale Club, among others, rose 1.4% after brokerage JPMorgan raised its rating on the club operator to “neutral” from “underweight.”
B Riley Financial fell 1.8% after the lender filed a notice of default with the Nasdaq.
(Reporting by Johann M Cherian in Bengaluru; Editing by Pooja Desai)
